Thus in London Oil Storage Co Ltd v seeat- Hasluck & C o (1904), where the auditors failed to check the petty cash which according to the books amounted to f 760 but which in fact amounted to f 30 they were held liable in damages. Cash balance as per books did not agree with the physical balance, the difference was misappropriated by … Google Scholar. In this case, auditors were held liable for negligence. The auditor should verify cash on hand (London Oil Storage company v. Seear, Hasluck & Co. (1940). Vs. Seear, Hasluck and Co. (1904): The facts of the case were that: (1) The clerk of the audit firm compared the petty cash book with the accounts and did not verify the balance of actual cash in hand; Company law is a growth area more so, probably, than any other area in law. All auditors reviewed four cases in which management had created a misleading description of the company (a frame) and a financial statement fraud The … (ii) The London Oil Storage Co. Ltd. Vs Sear Hasluck & Co. 2. London Oil Storage Co. “If the course of these long and arduous audits the auditor has in even one instance fallen short of the strict duty of an auditor, he cannot, I apprehend, be excused merely because in general, he displayed the highest degree of care and skill.” Google Scholar. WA Chip and Pulp Pty Ltd v Arthur Young and Co (1987) 5 ACLC 1002. The auditor has a duty to review accounts receivable so that they are not reflected in the balance sheet beyond their realizable value (Scarborough Harbour Commissioners v. Robinson, Co. oulson Kirby & Co. (1934). Successive legal precedent added further weight to … London Oil storage v Seear Hasluck  31 Acct LR1 Court stated: The auditors are expected to go beyond the books and records of the client for evidence to support their opinion about the truth and fairness of the financial statement In London Oil Storage Co. v. Seear Hasluck & Co., 1904, the judge enunciated the principle that auditors cannot place reliance on management representations in substitution for enquiries which they should have made themselves. In London Oil Storage Co. Ltd. v. Seear, Hasluck and Co. Dicksee on Auditing, 17th Edn. London and Oil Storage v Seear Hasluck and Co (1904) 31 The Accountant Law Reports 1. (3) London Oil Storage Co. vs. Seear Hasluck & Company (1904): It was held that an auditor, who fails to verify the existence of assets as shown in the Balance Sheet of the Company, is liable for damages but assessment of such damage is dependent on how far the negligence of the administration is contributory to such loss. Google Scholar. Re London and General Bank (No 2)  2 Ch 673. Pacific Acceptance v Forsyth & Others (1970) 92 WN(NSW) 29. London Oil Storage Co v Seear, Hasluck and Co, quoted in Guardian Insurance Co v Sharpe  2 DLR 417 (SCC) 424 to 425; Re City Equitable Fire Insurance Co  1 Ch 407 (CA) 509 to 510; Pacific Acceptance Corporation v Forsyth (1970) 92 WN (NSW) 29 at 62 Auditors failed to verify the physical existence of cash in hand. The London Oil Storage Co., Ltd, vs. Seear Hasluck and Co. (1904). It reaches out into other areas of law and, of course, new areas of law are always emerging, for example auditors negligence, investment law and the FSA and administration orders. Accounts receivable.
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